India: Portside prices of Indonesian thermal coal stable w-o-w amid weak demand

• Low domestic prices, high inventories cap Chinese purchases
  
  
• India demand cools amid ample stocks, low energy needs
  
  

Portside prices of Indonesian thermal prices to India are experiencing a period of stability with some underlying pressures amid supply dynamics, and regional demand variations.

Prices of the 3400 GAR at Navlakhi Port remained flat w-o-w at INR 4,750/tonne (t). At Kandla and Vizag, prices of the 4200 GAR stood stable w-o-w at INR 5,950/t and INR 5,850/t ex-port, respectively. Additionally, prices of 5000 GAR at Kandla remained stable w-o-w at INR 7,950/t, and at Vizag Port, high-CV coal were stable w-o-w at INR 7,800/t.

Notably, low power demand in India, and a stable flow of seaborne cargoes under long-term contracts were recorded. Despite this, demand for certain grades of Indonesian coal, particularly low-calorific value (CV), remained steady, as some Chinese power plants sought to blend these with higher-calorific domestic coal during the winter months.

"Activity in the Indonesian coal market was lacklustre with subdued demand from China where low domestic coal prices and high stocks dampened appetite for imports," sources informed BigMint.

An Indonesian source informed BigMint, "China is always looking for deals as it has to buy from Indonesia to keep the balance of trade. The Indian market picked up little after Diwali but not much."

India coal demand dull amid sufficient stock

In India, demand for seaborne coal remains low, as many industrial buyers continue to rely on domestic coal. However, some vessels of low-CV cargoes, which had been previously booked, are already lined up for delivery.

Additionally, thermal or non-coking coal stocks at Indian ports remained relatively stable, edging down by just 1.17% to 11.85 million tonnes (mnt) in week 46 from 11.99 mnt in week 45, as per BigMint's data.

Need based buying from Chinese buyer

In terms of demand in China, domestic coal supply has increased, narrowing the import window for seaborne coal. Chinese power plants that typically buy premium Indonesian low-CV coal are now seeking higher-grade of Indonesian mid-CV coal due to the weakening yuan.

However, Indonesian prices of high-CV (5800 GAR) coal were recorded at $93.85/t, down by $0.06/t. Mid-CV (4200 GAR) prices decreased by $0.15/t to $52.19/t, and low-CV (3400 GAR) was recorded at $32.37/t, fell by $0.06/t. All prices are on FOB basis.